Delineation of the relevant market forms a pivotal part of most antitrust
cases. The standard approach is sequential. First the product market
is delineated, then the geographical market is defined. Demand and
supply substitution in both the product dimension and the geographical
dimension will normally be stronger than substitution in either dimension.
By ignoring this one might decide first to define products narrowly and
then to define the geographical extent narrowly ignoring the possibility of
a diagonal substitution. These reflections are important in the empirical
delineation of product and geographical markets. Using a unique data set
for prices of Norwegian and Scottish salmon, we propose a methodology
for simultaneous market delineation and we demonstrate that compared
to a sequential approach conclusions will be reversed.
JEL: C3, K21, L41, Q22
Keywords: Relevant market, econometric delineation, salmon.